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The Department of Transport has published the Road Accident Fund Amendment Draft Bill 2023 for public comment.
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Dear South Africa founder, Rob Hutchinson joins The Burning Platform team on Cliff Central to discuss the latest coming out of the Road Accident Fund … and more.
SUMMARY OF THE ROAD ACCIDENT FUND AMENDMENT BILL 2023
On 8 September 2023 the Department of Transport published a draft Road Accident Fund Amendment Bill 2023. The last effective day for public comment is Friday 6 October 2023.
If the draft bill becomes law, the rights of all drivers, passengers and pedestrians to claim compensation for injuries they suffer in a motor vehicle accident will be taken away. In its place will be significantly curtailed “social benefits”.
In effect only very limited benefits will be paid and the changes amount to a drastic restriction of existing rights which will affect all South Africans (especially the poorest persons). Some of the most important restrictions on existing rights are:
- Loss of earnings
Currently, a claim for loss of income is paid out in a lump sum. Under the new system claimants will receive annuity (partial) payments that will eventually equal the lump sum. There is also the qualification that the amount payable is subject to periodic review of the Fund’s liabilities. If a claimant dies before the full annuities are received the payments will stop and their heirs will inherit nothing.
- Pain and suffering
Claimants will no longer receive compensation for pain, suffering, disfigurement and shock as this category of damage will be totally abolished.
- Exclusion from compensation
- Currently a claimant is covered for the negligent driving of a motor vehicle irrespective of where it is driven. Under the new system the accident must have taken place on a public road. Injuries suffered in motor vehicle accidents in parking areas, sports fields, farm roads, driveways, private estates, game reserves or any other private road will not be covered.
- Pedestrians crossing a highway are also specifically excluded.
- Claimants will not be covered if hit by an unidentified vehicle. Under the present system, so-called “hit and run” incidents are compensated.
- Presently anyone, regardless of nationality, who is injured by a motor vehicle in South Africa is covered.
- The proposed changes also specifically exclude from compensation any driver, pedestrian or cyclist over the legally prescribed alcohol limit, regardless of who was at fault, as well as their dependents should they be killed. It is also probable that this section will be interpreted to mean that passengers of persons who have drunk alcohol will also be excluded. Importantly, the RAF will be able to recover expenditure from persons who have drunk alcohol even if they did not cause the accident that they were involved in.
- Other exclusions from compensation include, for example, cases where there may be a product liability claim, persons injured whilst filming a movie or advertisement and passengers who may be covered by the operator’s passenger liability insurance – despite the fact that that cover may be very limited.
- Medical expenses
There will be no reimbursement of expenses covered by medical aid/insurance. This will drastically increase premiums with dire consequences for all medical aid members. The proposed amendments also bans compensation for any person who is not a South African citizen or direct permanent resident.Unlike the current dispensation, all future medical claims will have to be pre-authorised by the RAF or they will not be paid.
- Claims against the person who caused the accident
Although the changes drastically restrict the right of accident victims to claim compensation it does not allow innocent victims to sue the wrongdoer for damages not recovered from the RAF.
- Loss of earnings
The Bill seeks to
- amend the Road Accident Fund Act (“the Act”), 1996 as amended, so as to delete definitions and insert new definitions;
- clarify the nature of the Fund;
- give effect to the findings and recommendations of the Road Accident Fund Commission;
- reorganise the powers and functions of the Fund;
- repeal the Fund’s authority to appoint agents to administer claims;
- amend the constitution of the Board by including the Chief Executive Officer as an executive member of the Board;
- simplify the Act by moving procedural and administrative matters to the regulations and Board Notices; to limit the liability of the Fund to motor vehicle accidents occurring on public roads;
- remove the obligation for the Fund to compensate a third party for non-pecuniary loss;
- provide for the provision by the Fund of injury and death benefits subject to prescribed limits and periodical review;
- clarify exclusions of liability of the Fund; to extend the period before interest accrues on an award;
- remove the right of suppliers to claim from the Fund;
- provide for the further exclusion of the Fund’s liability in respect of specific third parties and specific situations;
- harmonise the prescription regime for all claims;
- enable the lodgement of claims by digital form;
- authorise the Board to stipulate terms and conditions for administrative claim processes and claim forms;
- provide for dispute resolution mechanisms and the establishment of the Office of Road Accident Fund Adjudicator to dispose of complaints by the third party in relation to the claims;
- restructure the Minister’s powers to make regulations;
- empower the Fund to make annuity payments for claims and to monitor and re-assess active claims;
- allow for lodgement of claims, on behalf of the claimants by other functionaries;
- make provisions to ensure compliance with Protection of Personal Information Act, 2013;
- amend the financial control provisions and align them to the Financial Sector Regulation Act, 2017;
- align the financial reporting requirements to the provisions of the Public Finance Management Act, 1999;
- enhance information submission provision requirements;
- align the provisions of the Act to case law; and, to provide for matters connected therewith.
Various stakeholders within the legal fraternity say the Road Accident Fund is in chaos. They have called on government to urgently intervene in what they have described as the deteriorating situation at the fund. The stakeholders have cited long queues, unprocessed claims and badly administered settlements. To discuss this further we are joined by Road Accident Fund CEO, Collins Letsoalo.